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T— V

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THE

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GOVERNMENT

AND THE

RAILROAD CORPORATIONS.

BY

CHARLES F. ADAMS, Jr.

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From the North American Review for January, 1871.

BOSTON:

JAMES R. OSGOOD AND COMPANY,

Late Tioknor & Fields, and Fields, Osgood, & Go.

1871.

235949

University Press: Welch, Bigelow, & Co.,
Cambridge.

» • •

• •

• -

• •

• • •

J

i£ GOVERNMENT AND THE RAILROAD'

CORPORATIONS.

Two years ago at this time, and again one year ago, an effort
was made in the pages of this Review to discuss certain mat-
ters incident to the growth of the wonderful railroad system
of the country ; to call attention to some of the abuses arising
out of its present form of management ; and, finally, to indicate,
as definitely as might be, a few of the more obvious dangers
with which this portentous development seemed to threaten our
political institutions. The material and moral advantages of
this development do not need to be dwelt upon ; they are
apparent to all. Neither the capital nor the labor of the coun-
try call for any exhortations to continue in the path which has
been, and will long continue to be, so rich in results. The
thousands of miles of annual construction, and the increased
millions of wealth and of persons transported, are arguments
sufficient in themselves. They do not, however, and never
will, constitute the whole of the railroad problem, and it is
very desirable that they should not sink into oblivion other
and hardly less important considerations. It is to these last
— the considerations appertaining to the moral and polit-
ical no less than to the more obvious material development of
a system — that discussion lias been devoted in tliCBe pages.
The character of this discussion has hitherto been wholly and
intentionally descriptive. It is easy to portray dangers : it
is very difficult to suggest remedies. It is natural to shrink
from the latter task in the hope that a simple statement of
what, when stated, is very obvious, may call forth from some
other quarter — from statesmen or from legislators, from those
whom experience or habits of reflection have better qualified
to speak authoritatively — a fitting solution of a difficult
problem. No such response has in this caso been elicited.

In place of it A]iftr6 has come up through the press and
from priyatc.souije*es'a voice rather of complaint at the short-
coming winch" portrayed difficulties and was silent as regarded
the ^oinedy. No one ignored the growth of the system or dc-
,f<Jfe"d69 its abuses or sought to make light of the threatened
I'dangers ; neither did any one suggest any desirable innovation.
in our system calculated to meet the acknowledged exigency.
The discussion so far has been barren ; mere statement has
elicited nothing. Now that another year has passed, it iB pro-
posed to recur again to the subject. The discussion must, how-
ever, this time attempt a step in advance ; the cure as well as
the evil must be considered. Of course no solution of a prob-
lem which all Europe as well as America is debating is likely
now and here to be arrived at through any happy inspiration.
The day for that sort of tiling is gone by, if indeed it ever
existed. Any proposed solution is, however, at least of some
value for purposes of discussion if for nothing else, and does
contribute something, even if that something be only of a nega-
tive character, to the grand result.

In the first place, however, a certain amount of repetition is
necessary. It would be futile to suppose that the papers re-
ferred to made at the time more than a passing impression, or
that the facts and iuferences stated in them are yet retained in
the memory of any one. Neither is any such retention neces-
sary. As regards the matters with which those papers under-
took to deal, each year's development of the railroad problem
repeats the story with striking variations. No article of this sort
would be complete without a rapid glance at the growth of the
system during the past year, and such a review is not likely to
be at all devoid of interest. The first part of this paper will
therefore be devoted to the preliminary statementof difficulties
which should naturally lead to a suggestion of remedies.

The points in connection with the railroad system to which
the public attention has heretofore chiefly been called in these
pages are few in number. Most prominent among them has
been the rapid growth of individual members of the system ;
the tendency to consolidation and combination in all the mem-
bers ; the scandalous, internal abuses, incident to corporate
control, and, finally, the development of a disturbing if not con-

trolling influence in our political system. A review" of the in-
cidents of the last year under each of these heads could hardly
fail to be interesting, did time and space admit of it. As this,
however, is out of the question, a few illustrations must suf-
fice from which much more may safely be inferred. In the
matter of consolidation, for instance, — the massing of great
interests under one control, — it is unnecessary to dwell upon
the details of growth of each of those four trunk lines now
rapidly parcelling out among themselves all the Northern
States east of the Missouri. The same principle of develop-
ment, though manifesting itself through various outward phases,
has controlled them all ; mulalis mutandis, the experience of
one is the experience of all. Take, for instance, the New York
Central, the road which forms the nucleus of what is known as the
Vanderbilt combination. Seventeen years ago it was not in ex-
istence as a corporation. In 1853 it was chartered and grew into
life out of the six separate links, not one of them seventy-six
miles in length, which divided the three hundred miles of road
between Albany and Buffalo. This corporation was again, in
its turn, merged in 1809 into the larger New York Central and
Hudson River Raiload Company, which controls within the
State of New York but little less than a thousand miles of track
and much more than $100,000,000 of capital. The consoli-
dation so far was perfect, and had taken place under a State
charter and within State limits. Growth, however, did not
stop here ; the combinations of capital simply adapted them-
selves to the forms of a political system. Beyond the limits of
New York the corporation held, in the eye of the law, no prop-
erty ; it did not control a mile of track. At Buffalo, however,
the Central connected with another company, itself made up of
four separate primal links which had once connected Buffalo
with Chicago, and which had united in obedience to the same
law of development which had built up the Central, West of
Chicago came yet other links in the trans-continental chain.
Three lines competed to fill the gap which lay between Chicago
and the eastern terminus of the Faeific Road, — the Northwest-
ern, the Rock Island, and the Burlington and Missouri. In the
autumn of 18G9 the consolidation of the Central and the Hud-
son River took place. Immediately afterwards, at the annual
2

election of the Lake Shore and Michigan Southern, the Vander-
bilt interest took open possession of that corporation, controlling
a majority of its stock. In May, 1870, it in like manner
assumed control of the Rock Island and Chicago and North-
western. The same parties in interest were now practically
the owners of a connected line of road from New York to
Omaha ; there was no consolidation as yet, hut, so far aa
the public and competing roads wore concerned, the close of
1870 found the sis parties which hut a short time before had
been in possession of the trans-continental thoroughfare re-
duced to three. Thus rapid had been the progress of consoli-
dation, — the irresistible law of development of the railroad
system. The inference is inevitable. Seventeen years ago
six roads divided the route between Albany and Buffalo, and in
185ii these were consolidated into one. Three years ago four
roads connected New York with Chicago, and these four were
then reduced to two. One year ago five roads divided among
them the distance between the Atlantic and the Pacific ; six
months ago these five were practically reduced to three. How
long will it be before these three are reduced to one ? How
long before consolidation, as yet confined to connecting, will
extend to competing roads ? It is perfectly useless to discuss
the question whether this massing of wealth and of power is
desirable or otherwise. It is sufficient to recognize the fact
that it is inevitable, that it is a natural law of growth.
Legislation could only wage a futile war against it ; checked
in one form, it would devise another ; by indirections it would
find directions out. It lias been steadily going on from the
beginning; it is now going on, and it is not likely to stop.
No legislation can prevent it, even were such prevention de-
sirable. Any attempt in this direction will but result in a re-
course to subterfuge, and the practical reduction of law to a
dead letter. You cannot prevent, but you may, by looking at
facts as they are, not inefficiently regulate. How this can best
be done is the problem.

One fact must be accepted to begin with, — the railroad
system has burst through State limits. Already not a few
corporations have carried their operations into half the States
of the Union. Capital does not recognize the territorial divis-

ions of a common country; nominally it may evado them, but
practically it destroys tliem. Either through the machinery
of different corporations, or through consolidation, one great
moneyed and managing interest is destined at no distant day to
own every mile of railway on a direct line from New York to
Sau Francisco. In what must sucli an ownership inevitably
result 1 It is uot wise to attempt to deal with a too remote
future ; but in this instance the future is very immediate, and
the question at issue involves some of the most delicate con-
siderations connected with our federal system.

What is known as the doctrine of States rights — the
invaluable centrifugal force of our political organism — fell
into much unmerited odium through its abuse during the
progress of the irrepressible conflict. It was and is a most
useful and essential feature in our constilutional polity. The
Americau people still hold it in strong affection, and cling
tenaciously to State lines and State authority. Nothing which
tends to obliterate the one or diminish the other is regarded
with popular favor. This is particularly the case in view of
the great and growing incompetence so manifest in the national
Congress. Nothing that this body now has to deal with is
treated in a large and comprehensive spirit, and its legisla-
tion is almost invariably composed of shreds and tatters.
Thus people do not look with favor on the prospect of yet
other great and delicate interests devolving upon it. All this
is true, but it will not avert the inevitable. It may be very
unfortunate that our great lines of railroad should become
national routes, but such considerations cannot control the
fact ; national routes they are, and as such they cannot much
longer be organized or controlled under State laws. The
Federal government must assume a certain degree of active
jurisdiction as regards them, and that very shortly. The Con-
stitution, under the clause authorizing Congress to regulate
commerce between the States, clearly warrants such assump-
tion. Under this clause Congress has always exercised a
control over navigable rivers ; but the commerce between the
States is no longer carried on by bai'ge or by steamer, but
by rail. The question for the consideration of intelligent
observers is no longer, then, Shall the national government

8

assume this control ? but, How shall it be exercised when
assumed ? During every session for years past Congress has
trembled upon the verge of legislation ; a regulated railroad
between Washington and New York being the alleged necessity.
Everything that has gone upon the statute-book looking in this
direction, like the Pacific Railroad business, or the land-grant
system, has been of the most unfortunate character. Hith-
erto, however, nothing has been done which necessarily com-
promises the final result ; no irrevocable step has been 'taken.
That, when taken, it should be taken right, is of the last im-
portance.

Besides the consolidation of connecting roads, another phase
of the same gravitating movement was discussed at some length
in this Review a year ago. In many of the States legislation has
been directed against the consolidation of competing lines. Two
years ago an act forbidding it was passed in New York, and
more recently a provision to the same end has been incorpo-
rated into the Constitutions of Illinois and of Michigan. It is
wholly unnecessary to say that all such measures of State
legislation are utterly futile, almost childish. These giants
have some time since outgrown State swaddling-clothes. Even
had they hot, the character of such legislation is most open to
criticism. Certainty and responsibility in management are
two of the most important requisites of a good railroad
system. This is peculiarly the case in America, where almost
our only machinery for the correction of abuses lies in the
degree of concentration with which public opinion can be
brought to bear in a given direction. If our people distinctly
feel an evil and can be made to see that some one is responsible
for it, there is no interest nor combination of interests which
can long resist the pressure. So far as railroads are concerned,
competition puts both certainty and responsibility out of the
question ; it renders the first impossible, and, by dividing,
destroys the last. A most conclusive illustration of this
proposition, as well as of the utter insufficiency of State legis-
lation to deal with the subject, may be found in the experience
of the last year.
^^ The system of transportation of freight through the agency
-^ of what are known as the colored lines is now pretty generally

understood. A largo number of cars, colored red, white, or
blue, according to the organization to which they belong, carry
most of the through freight, in regard to which competition
exists, from West to East. These cars in some cases belong to
the railroad companies, and, in other cases, to individuals;
in no case, however, do they operate for the companies indi-
vidually, but for a combination of which the particular company
owning the cars is a member. This combination constitutes
a copartnership of corporations, having its complete and sepa-
rate organization of clearing-house, accounts, clerks, agents, and
runners, carrying on operations all over the country, and for-
warding freight in every direction. The profits of the busi-
ness are divided among the roads or individuals of which the
combination consists, on a basis established in advance. The
combinations are, in fact, freight express lines. During the
last year the competition between these lines, and consequently
between the roads over which they were operated, was bitter
in the extreme. The rates made East and West were simply
ruinous. On certain descriptions of freight they literally were
reduced to nothing, and cattle were carried over the Erie
road at a cent a head, 83 against one dollar a car, the rate
charged on the Central. On other articles the reduction was
not so great, but, both on passengers and goods, rates were
purely nominal, and hardly averaged a third of the usual
amounts. Of course this could not last. Early in September
representatives of the competing lines met in New York, and
proceeded to put a stop to competition in the one way possible
among monopolists, — by combination. The parties in interest
were the Central, the Erie, and the Pennsylvania Railroads.
The competition was mainly from Illinois to New York. In
both Illinois and New York laws forbidding the consolidation
of competing lines were in force, and all the roads were carry-
ing on operations in one or both of those States. At the
meeting in question it was decided to " pool " the- earnings of
the colored lines to all competing points ; in other words, all
receipts from that business which was supposed to receive a
peculiar benefit from competition, were to be paid into a common
fund, competition was immediately to cease, fixed rates were
j charged, and thus, at last, all the great trunk lines were

10

to be practically consolidated, in so far as the business commu-
nity was concerned. This arrangement was agreed to, but broke
down for the moment because of quarrels among certain of the
individual contracting potentates. The two irreeoucilables
were Gould and Vanderbilt, who represented two New York
roads ; and yet the New York statute-book contained a recently
enacted law intended to prevent and render impracticable any
combination like the one agreed upon. Not being able to
effect the desired arrangement there, certain of the same
parties went to Chicago, in a State where a similar provision
to that in force in New York had been made a part of the
Constitution, and there they actually did enter into an agree-
ment, under which all the roads between Chicago and Omaha
" pooled " their receipts between those points, and this contract
went into effect. Yet no law, no constitutional restriction,
was violated. No law, in fact, could be framed which would
meet the case, and the solemn efforts to accomplish it were
simply illustrative of the extreme ignorance prevailing among
fairly intelligent men as to the practical limits of legislation.

The failure of the New York negotiation was, however, only
temporary ; the thing will be done, and, moreover, it is by no
means clear that it is not best for the community that it should
be done. In this combination at last will be found both re-
sponsibility and certainty. Rates will no longer vary with
every season and to every city ; points destitute of competition
will not be plundered, as they now habitually are, that compet-
ing points may be supplied for nothing. During the last
summer many towns in New England were charged upon West-
ern freights heavily in advance of the sums charged for carrying
the same freights on the same roads a hundred or two milea
farther on. All because, through competition, the farther
point was served at a loss to the carrier, and, therefore, the
nearer had to pay the road profits for both, besides replacing
the loss. The agents of the roads do not seek to deny this ;
they acknowledge and defend it. They say, and say truly :
" We must live. If our through business is done at a loss (and
they show that it was done for nothing), then our local busi-
ness must pay for all." This was the case in New England.
The cities of central New York fared no better. During a war

of rates, almost any manufactured article will be carried from
the Beaboard to the West for perhaps one half of the amount
charged for carrying the article there from a semi-interior
point. So also as regards Eastern freights. Syracuse, Roches-
ter, and the like class of cities can neither compete on equal
terms with Boston in the markets of the West, nor with Chi-
cago in those of the East. The discrimination against them is
said to amount in certain cases to ten per cent of the whole
value of the article transported. Neither, under the existing
system, is there any remedy for this evil, and a consciousness
of this fact, of the risk to which they are continually ex-
posed, has caused the breaking up of many manufacturing
establishments at interior points.

Again, the element of gambling is not considered as an ad-
vantageous one in the transaction of business. To eliminate
it, to equalize, to insure stability and an even operation of
natural laws in trade, is one attribute of an advancing civiliza-
tion and a chief result of science. Does not a sudden change
in a tariff — a change sprung on the community in an hour,
ranging all the way from one hundred to fifteen thousand per
cent on all classes of freights — infuse an element of chance into
current transactions ? Just this fluctuation took place in Sep-
tember, 1870. How, also, can the business community deal
with certainty, or make orders or contracts, when to-day it
may cost far more to send goods from Boston to Chicago than
from New York, and to-raorrow New York firms may have to
ship their goods to Boston as the cheapest way of getting them
to the West. Thus competition by rail, unlike that by sea,
knows no law of supply and demand ; there is always a
given supply of machinery, wholly irrespective of the demands
of trade. Here, then, is no certainty, no stability ; a great
evil exists ; yet who is to be held responsible for it ? Upon
what point is public opinion to be concentrated ? It cannot be
on the system, for nothing of the sort in an organized form
exists ; neither can it be on individuals, for they clearly can-
not control events, otherwise there would be no recourse to
"pooling." The responsibility, in fact, is absolutely divided
away ; it does not exist.

States and legislatures will doubtless for some little while

12

longer cling to the idea of competition as regulating tariffs by
rail, but it must break down in the end. The value of com-
petition as affecting the railroad service lies in the superior
quality of the service it exacts, the promptness, comfort,
civility, and general regard to the wishes of the public. This
is instantly apparent to any one who passes from the compet-
ing roads east of the Missouri on to the Central Pacific. These
things no law can regulate, but competition does ; the whole
subject of rates, on the other hand, the law can and ultimately
must regulate. Competition merely causes them to fluctuate
wildly, according as an internecine w$r or a combination to
plunder may for the moment prevail.

A fixed minimum of railroad charges is no less essential to
the community than a fixed maximum. One point or section
or town cannot, on such a vital matter as transportation, be at
the mercy of a competition which may exist to another. The
moment it is, all stability and certainty vanish from industry.
Such an element of chance is worse even than the droughts
and ice which affected carriage by water. How and by whom
is this great business of transportation through monopolies to
be regulated ? One man cannot buy up Lake Brie or the Mis-
souri, and drive away from their waters every boat not owned
by him ; yet channels more important to the trade of a con-
tinent than any lake or any river, no matter how large or
how long, are now held in practical ownership by a few of the
most notoriously unscrupulous men in the whole land, to be
regulated as to them may seem good. Under the present
rSgime they cannot even be held to a responsibility. That
such a system should be permanent is the reverse of prob-
able.

There only remains sufficient space to allude to one more
subject in this connection. The power of these corporations in
the hands of corrupt men as a disturbing and degrading in-
fluence in our politics, and the crying abuses so notorious in
the internal administration of corporate affairs, have of late
occasioned no inconsiderable degree of public solicitude. Ex-
amples of both descriptions of evil referred to are always at
hand, and the year just past has been peculiarly prolific of
them. Certain instances, however, pall by force of repetition ;

certain men succeed in acquiring a pre-eminence in infamz
which actually destroys their value for purposes of illustration.
The world grows weary of hearing of them. The frauds and
outrages in the Erie management, for instance, have, perhaps,
been dwelt upon ad nauseam. Not that justice has been, or,
outside of a prison door, welt can he done to their perpetrators,
but nothing implicating them can longer excite surprise. From
the leading criminals themselves to the couriBel who revel in
their dirty work, these meu have now brought all the discredit
they can on everything with which they live in contact, from
American credit down to the New York bar. It is, therefore,
hardly worth while to go on with the contributions of another
year to their long bead-roll of offences. A new illustration
from other quarters of the abuso of political influence would
be more effective. Even if no evidence should be found to
exist of the perpetration of fraud, yet the opportunity for it
may exist so evidently, — the way, if the will were only
there, — that the propriety of removing from erring humanity
such an ever-present temptation may prove a subject worthy
of grave discussion. Upon looking over the broad field, vari-
ous scandals at once suggest themselves. The incidents of the
recent Congress and its suspicious squandering of public lands
would naturally bo the first. Especially those vast grants
which have endowed a single corporation — the Northern
Pacific — with an appanage nearly equal to a dozen States of
the size of Massachusetts, and hardly, if at all, falling short of
the united areas of the five second-class European kingdoms
of Denmark, Holland, Belgium, Portugal, and Greece. At one
time during the last wiuter there were railroad schemes pend-
ing before Congress which appropriated four hundred million
acres of the public domain, — an area larger than the whole
original thirteen Colonies. Of the Southern States it would bo
mere waste of time to speak. Their railroad bond transac-
tions command no confidence, and would not reward the
trouble of exposure, however plentifully they might furnish
the material of bitter satire. New York, its legislature, its
courts, and its corporations, are, for reasons ab-eady given,
outside the pale of discussion. The case here is conceded, and
the % 5,000,000 check which the thoughtless Vauderbilt signed

14

without a glance, aa a mere detail in the business of a morn-
ing, is as inadmissible as are the unending wars of Colonel
Fisk, or the experiences of Mr. Burt in the committee-rooms
at Albany. Massachusetts next offers a tempting field, but
perhaps on an insufficient scale. The Hartford and Erie pro-
ceedings were as gross an outrage on common honesty, and
even common decency, as lawyer ever sought to palliate, or a
venal lobby to sustain. That a corporation should waste its
substance in stock-jobbing, and gamble away funds held in
trust in operating for its direction's benefit in its own securi-
ties, is notable enough ; that beyond all this, tho same cor-
poration should persuade a legislature to loan it yet other funds
to replace those lost in the game of chance would seem in-
credible. Yet all this took place, and the veto power alone
saved the honor of the State. Neither were the proceedings
in New Hampshire devoid of interest. In that State the pro-
ceedings, both of the executive and of the legislature, strikingly
illustrated the vicissitudes of corporate life. A president-gov-
ernor played for bis railroad with its stockholders, and the
legislature was umpire in the game. These examples might
be too local in their interest. Illustrations may equally well
be drawn from larger corporations operating in more central
sites ; take, for example, the record of the Pennsylvania rail-
roads in the legislature of that State.

The Pennsylvania Railroad should need no introduction to
any American reader. It is probably to-day the most power-
ful corporation in the world, as, indeed, it owns and operates
one of the oldest of railroads. Its organization, as compared
with that of its great rival, the New York Central, bears the
relation of a republic to an empire. Csesarism is the prin-
ciple of tho Vanderbilt group ; the corporation is the essence
of the Pennsylvania system. The marked degree in which the
character of the people have given an insensible direction to
the management of their corporations in these two States is
well deserving of notice. In New York politics the individual
leader has ever been the centre ; in Pennsylvania, always the
party. The people of this last State are not marked by intelli-
gence ; they are, in fact, dull, uninteresting, very slow and very
persevering. These are qualities, however, which they bold in

15

common with the ancient Romans, and they possess, also, in a
marked degree, one other characteristic of that classic race,
the power of organization, and through it of command. They
have always decided our presidential elections ; they have al-
ways, in their dull, heavy fashion, regulated our economical
policy ; their iron-masters have in truth proved iron masters
indeed, when viewed hy other localities through the medium of
the protective system hy them imposed. Not open to argu-
ment, not receptive of ideas, not given to flashes of brilliant
execution, this State none the les3 knows well what it wants,
and knows equally well how to organize to secure it. Its
great railroad affords a striking illustration in point. It is
prohahly the most thoroughly organized corporation, that
in which each individual is most entirely absorbed in the
corporate whole, now in existence. With its president and
its four vice-prcsidonts, each of whom devotes his whole soul
to his peculiar province, whether it he to fight a rival line,
to develop an inchoate traffic, to manipulate the legislature, or
to operate the road, — with this perfect machinery and subor-
dination there is no reason why to-day the corporation should
not assume absolute control of all the railroads of Pennsyl-
vania. Indeed, it could take possession of the State govern-
ment, if it really desired to do so. His Excellency the Governor
might very appropriately be one of the vice-presidents of the
road, and, indeed, while such a connection would add largely
to the executive influence, it is doubtful if it would propor-
tionately increase the political power of the corporation. Such
solidity in one party to a conflict is almost sure ultimately to
overcome the elan of rivals like those it has to encounter from
New York-
Such is this great corporation, high in credit in the money-
markets of the world, careful withal of its outward repute,
apparently unbounded in its resources. Organized so long ago
as 18:31, it had thirty miles of road ready for operation iu the
succeeding year. Not until 1854, however, was the Pennsyl-
vania Railroad proper completed. It then controlled the line
from Harris burg to Pittsburg, two hundred and ten miles,
which had cost a little less than $17,000,000, and was rep-
resented by about $12,000, , 000 of stock and $7,000,000 of

16

indebtedness. This might be considered the starting-pcint ;
$ 3,500,000 of annual gross earnings on a capital a little less
than $ 20,000,000. For many years its growth was confined
to Pennsylvania. In 1869, however, its policy in this respect
underwent a change, and it burst through State limits, extend
ing its field of operations over the vast region lying between the
great lakes and the Ohio upon the north and south, and the
Missouri on the west. The corporation now owns nearly four
hundred miles of road in Pennsylvania, and directly con-
trols twelve hundred miles more, almost entirely within
the same State ; beyond its limits it leases and operates
nearly sixteen hundred miles in addition,* holding the stock
and bonds of railroads, canals, towns, and cities, like some vast
Credit Mobilier ; it has, indeed, no less than $20,000,000
standing on its books as represented by these investments.
Meanwhile in the sixteen years its own capital and indebted-
ness has swollen from $20,000,000 to $65,000,000, with a
liberty secured to increase them to nearly $ 100,000,000 ; at
the same time the system of roads which it holds in its hands
returns a yearly income of hardly less than $ 40,000,000, of
which about $ 10,000,000 is claimed as net profit.

When it is remembered that one third of all the railroad
mileage in Pennsylvania is directly controlled by this company,
some idea may be formed of the influence exercised by it in a
legislative body, famous since the days of Nicholas Biddle for
subservience to moneyed influence. This corporation, however,
does not stand alone ; mighty in itself, it is also the acknowl-
edged head of that secular railroad hierarchy which shapes
the destinies of Pennsylvania, and is immediately represented
in every branch of the national government. It is, indeed,
intrenched in power, and, while it avoids all noisy scandal, it
may also defy attack.

In the winter of 1870 the Pennsylvania combination was as

* As these pages are passing through the press it is announced that the Pennsyl-
vania Railroad has further effected a lease of all the property of the Camden and
Amboy corporation. The value of the property thus transferred is stated to be
over $40,000,000. As the entire region north of the Potomac must now be re-
garded as parcelled out among the four contracting powers, this might deserve, in
so far as the Erie and New York Central are concerned, to be referred to as a
" portentous rectification of frontiers."

17

busily engaged as ever in its schemes of expansion, and was
casting its eager eyes about in search of ways and means.
These finally rested on no less a, quarry than the sinking
fund of the State itself, solemnly pledged by constitutional
provision to the payment of the public debt. It amounted to
$9,500,000, and an attempt upon it was resolved. The
necessary arrangements were silently perfected. The Con-
stitution of the State bristled with adverse provisions. In
order to prevent " log-rolling," it was provided that but a
single measure could be contained in any one bill ; another
clause directly inhibited the Commonwealth from having finan-
cial relations with any private corporation ; a third clearly as-
serted the sacred character of the sinking fund , and guaranteed
it to specific purposes. Each of these difficulties was circum-
vented. Every step of the process constituted a study in legal
legerdemain. The several acts necessary to incorporate the
various enterprises, which constituted the common bond of the
combination, were passed separately, in accordance with con-
stitutional requirement ; to outward appearance they were
proper, and even desirable measures. The organic acts thus
lay on the statute-book, dead letters ; it remained to infuse
into them the breath of life. The legislature could still in-
clude but one subject in any single act, and could loan neither
the public credit nor the public money to private corporations.
Now came the masterpiece. One sweeping general act in re-
lation to railroads directed the substitution of the bonds of
these companies not yet organized, and whose roads were not
commenced and might never be profitable, for the undoubted
securities which represented the sinking fund in the treasury
of the State. The legislature thus did not loan the credit of
the State, did not lay its hands upon the sinking fund, it only,
in the exercise of a sound discretion, substituted one security
in the treasury for another; that the one security was un-
doubted, and the other less than doubtful, was notorious, but
not set forth in the act. A more audacious scheme of plunder
could hardly have been devised. The influence of great cor-
porate wealth was sharply illustrated in the subsequent history
of this measure. It encountered almost no opposition until it
was submitted for executive approval as a law. The very press

of the State was dumb, and if it did not actively sustain, was
contented silently to acquiesce. So far as public opinion and
the legislative department were concerned, a railroad combina-
tion owned the Common wealth. Through some oversight the
executive had not been secured ; the bill was returned by Gov-
ernor Geary with a veto message which should be lastingly
remembered to bis credit. That the grounds taken in this
document were irrefutable by no means accounts for the failure
of the legislature to enact the measure into a law by the neces-
sary two-thirds vote. It is difficult to say why the corporations
shrunk from the conflict, — whether from motives of policy, or
from pure surprise at such unwonted temerity. Shrink, how-
ever, they did, and, for the moment, the sinking fund of the
Commonwealth was safe.

The Pennsylvania hierarchy is, however, never discour-
This same moasure, or any similar measure which it
i fit to urge, will ultimately become a law. Its method
: in all such cases is so organized, so silent, so
sure, that it has cast a sort of spell over the mhid and con-
science of the State ; resistance to it seems hopeless ; a fatality
accompanies its progress. Discuss the propriety of opposing
it with intelligent Pennsylvanians, and their language is that
of hereditary bondsmen ; they may abuse it and pass all man-
ner of harsh and, perhaps, unjustifiable criticisms upon its
course and method of dealing, but to resist it, to regulate it,
seems to them like a suggestion of the impossible, like a
proposition to resist the tide or to regulate the sun.

Three essential features in the growth of the railroad system
have now beeu briefly referred to and illustrated ; the consoli-
dation of connecting roads, obliterating State limits ; the com-
bination of competing roads, evading State jurisdiction ; finally,
the concentration under corporate control of a degree of
wealth and influence greater than any existing machinery of
State government can control. It is useless further to pursue
this branch of the discussion. It might, perchance, be profit-
able to do so, were the difficulties, political and moral, which
have hitherto been dwelt upon met hi any quarter with a denial.
This, however, is not the case. If the conclusions were not ob-
vious from the experience of other States, the outrages annually

perpetrated, both by courts and legislature, under the name of
law hi New York would plaee them beyond the need of proof.
In that State even the corporate system itself has broken down.
The stockholder has no longer a voice in the management of
the affairs of the corporation. The annual farce enacted in the
Erie offices, when the de facta possessors of that thoroughfare
go through the form of renewing their control over it, is an
illustration in point. From whatever side the discussion is
approached it leads to the same result. The existing railroad
system, both internally and externally, as regards the legis-
lature, the exchange, and the stockholder, — as serving the
community by competition or through combination, is hi an
unsatisfactory and dangerous condition. Materially it is a
great success ; that fact has hitherto enabled it to support its
abuses, and may continue to do so for some time longer. A
rapid change, however, is visible even to the least observant.
Competition was the soul of our system ; yet competition is
steadily yielding to the desire for combination. The corporate
principle has failed no less than competition, and the idea of
management through representation has already given way to
the one-man power. Regulation through State authority has
proved the saddest failure of all, for the energetic whole can,
hardly be controlled by the incompetent government of a
part. None of these propositions can be successfully contro-
verted. It only remains, then, to pass to the other and far more
difficult branch of the discussion. The remedy is to he treated
of; the next phase of development is to be considered. Tho
prospect of any great result attending the present effort in this
direction is not brilliant ; while, however, not much is likely to
be gained through tho attempt, little i3 jeopardized by it.

That the national government must then, booh or late, and
in a greater or less degree, assume a railroad jurisdiction, is
accepted as an obvious conclusion to be deduced from the
irresistible development of the system in a coutbo it has
hitherto pursued. The next question is when, and in what
way, and to what extent, is this to be done ? What is to be tho
hasis of legislation ? This now admits of almost infinite modi-
fication, ranging from public ownership on the one hand, to the
most limited regulation on the other. The same may ho said

as to extent of jurisdiction. It may be assumed over all roads
lying in more than one State, or it may be confined to certain
trunk lines specially designated as military and post roads.
These questions it is now premature to discuss. They consti-
tute the final problem. All other proposed solutions of it,
resting upon State regulation or State control, are but tempo-
rizing expedients, important simply as illustrating the practical
value of certain theories. Such may prove instructive resting-
places; they can hardly be the final objective. To these, how-
ever, attention should now be confined, for through them the
ultimate results are to he evolved. Fortunately the national
field is yet clear. The utter breakdown of all the existing
State systems should at least be full of instruction to those who
must build up a national policy. They will be hampered by
no precedents, trammelled by no machinery, inadequate and yet
existing, but they will be free to create a system both adequate
to the needs of the age, aud in conformity with the character
of our constitutions. It is a work which in all probability
must soon be undertaken, and one which might well task the
ability of a Hamilton. It is greatly to be hoped that, until some
man competent to deal with it shall present himself and quietly
assume the task, the present local chaos will be suffered to
continue ; otherwise we may all perchance find ourselves in-
volved in some general muddle such as now exists in more
than one locality. The preliminary difficulty in the case is
very evident. It needs now to be stated with all possible
emphasis, for it will continually present itself throughout what
remains of this discussion, and must ever be borne in mind.
The whole difficulty arises from the development of a material
and moral power, or rather, perhaps, combination of powers,
in our social organism which our political system was not cal-
culated to deal with. At the time the framework of our gov-
ernment was put together, a system of necessary monopolies
was the very last thing which was expected to present itself on
this continent. Our governments, state and national, grew up
among, and were calculated for, a community in the less com-
plex stages of civilization. Our whole machinery looked to
dealing with individuals, and that only in the least degree
which deserved the name of government at all. The idea of

one man, or set of men, combining to own in absolute monopoly
the great channels of internal communication as they then ex-
isted, — the Hudson, or the Ohio, or the great lakes, — would
have been regarded as a wholly inadmissible supposition, a
contingency impossible to occur. Consequently no provision
was made for it. No machinery was devised calculated to
meet such an improbable emergency. Yet that very emergency
is now close at hand, if not already here.

To supply the national government with this supplementary
power, to adapt it to the uew exigency in order that it may
not break down under it, is, however, the work of the morrow,
and will be final in its character ; that of to-day is fortunately
not conclusivo, but of a tentative nature ; this, in short, is the
period of transition. The roads are not yet out of the hands
of the States; it is through them that the preliminary work ia
yet to be done. Something is to be derived from their experi-
ence in the past ; the rest must come from their experiments
in the future.

The tendency of popnlar thought is now undoubtedly towards
the ownership of railroads by the community. The success of
this system in Belgium, and the agitation in regard to it in
England and in certain portions of this country, make it emi-
nently desirable that the experiment should be tried, if only
with a view of testing a theory and giving a new direction to
inquiry. The present is also a time peculiarly opportune in
which to make the attempt, for it can now be eBsayed on a
small scale, involving, at most, interests comparatively trifling.
The result, as bearing on the final national problem, could not
fail to be most instructive. It is impossible, in view of past
experience, not to entertain grave doubts as to the result of
any experiment of this sort, made through the political ma-
chinery which exists in America. As regards the construction
of a railroad system, it has repeatedly been tried and uniformly
ended in failure. Pennsylvania, Ohio, Michigan, Illinois, and
many other States went through the same sad experience.
Every section with us had its claims, and those claims could
not be disregarded. " Log-rolling," and the legislative " truck
and dicker," were rapidly developed into an intricate study
and lucrative profession. In Belgium, in France, or in Russia

a government engineer can locate a railway, and there an end ;
it was found to be otherwise in America, and an impartial
disregard of the figures of the census by no means resulted in
a commercial success. It is, however, argued that it would be
otherwise in the case, of a completed system ; that if our State
governments could not construct, they could at least manage
railroads. This remains to be seen. That the government
should engage iu any business, whether as producers, as carri-
ers, as bankers, or as manufacturers, is opposed to the whole
theory of strictly limited governmental functions. Whether it
is possible to secure a board outside of politics which would
manage our railroads with a shrewdness and zeal equal to that
displayed by individuals, stimulated by the hope of gain, is only
to be decided by experience. That experience we probably
shall soon have. Should, however, the experiment succeed
when attempted by a State, no conclusion could safely be drawn
as to its results in a national form. The Federal government
is peculiarly and obviously unfitted for any work of the sort, —
certainly uutil a thorough and sweeping reform of the civil
service is effected. A purified political atmosphere may be
imagined in which at some future time it would be safe for
Congress to assume the management, through supervising
boards, of certain designated continental routes ; hut any move-
ment in that direction would certainly, and very properly,
encounter a strong and determined opposition so long as the
present condition of affairs exists, and could only result in in-
creased corruption and commercial disaster. It is difficult also
to see how even experiments at State management can succeed,
except under most favorable auspices and on a very limited
scale. They will inevitably be attempted, not on the local
roads, but upon fragments of the great trunk lines. These no
one State can wholly control. It can only possess itself of the
fractional portion of the whole within its own limits. This
cannot answer the requirements of the community, which dis-
tinctly demands a correction of the abuses existing in the
main thoroughfares. Here is where the difficulty lies. Local
lines can scarcely be purified and controlled, while the through
lines are amenable to no law. Any effective reform must be
tested in its application to these last, and these are already

beyond State jurisdiction. While, therefore, an attempt at
State ownership could hardly fail to be of great illustrative
value, there are probably other directions in which experiment
could more usefully be tried.

1A safer solution of the difficulty may not improbably yet be
found in effective regulation, than in State ownership. This
last looks to the destruction of the principle of private cor-
porate life as the basis of the railroad system, and to the
adoption of the whole of it into the body politic. Regulation,
on the other hand, proposes to have the government, while pre-
serving the separation between the body politic and all private
industry, yet exercise an active control over its own creations.
This is the tendency of legislation in many of the Western
States, where the results of government meddling are still
fresh in the popular memory. Foremost among these States
is Illinois. In the remarkable Constitution just adopted there
the great principle is for the first time recognized that the rail-
road system is exceptional among all industrial pursuits, and
must be recognized and dealt with as such. This in itself is
an immense stride in advance. It is the concession of a start-
ing-point, the recognition of that new social and political
force for which no provision had been made. When a defi-
ciency is fairly acknowledged, we can in America feel a toler-
able confidence that it will shortly be supplied. The provisions
introduced into the Illinois Constitution are, indeed, crude and
unsatisfactory, but they are a beginning, and they at least
indicate vigorous minds at woric upon the subject in the North-
west. A discussion of these provisions would bring into view at
once the very point upon which our State systems have hitherto
broken down in their attempts to deal with the railroad devel-
opment. The probabilities are enormous also that the national
system, whenever it takes the form of law, will break down on
that same point.

The one striking feature of the Illinois Constitution is the
strong resolve of its framers to do away with what are known
In England as " private bills," and in this country as special
legislation. It is unnecessary to dilate upon the nature of this
abuse, which may safely be BCt down as the greatest danger to
which any system of government is liable ; it may almost be

said to be the root of all political ilia. Legislation should
know nothing of individuals. All modern thought tends to
the conclusion that the universe is controlled by general laws ;
and the belief in special providences is entertained only by the
most superstitious. A sound system of government should
recognize individuals no more than the laws of nature recog-
nize them. The law should apply to all, without discrimina-
tion for or against. The system of special legislation, on the
contrary, from top to bottom, is based on a supposed necessity,
which is taken for granted as existing, that privileges may be
conceded to one or a few which it is not safe or politic to con-
cedo to all. Nature never acts in this way, nor will thoroughly
enlightened governments do so, when any such exist. The
Illinois Constitution deserves to be hailed as a great advance
towards the realization of this idea. The framers of this
instrument, when they came to dealing with railways, provided
for their regulation these articles, among others : —

Article XI.

CORPORATIONS.

§ 1. "No corporation shall be created by special laws, or its charter
extended, changed, or amended ; . . . but the General Assembly shall
provide, by general laws, for the organization, of all corporations here-
after to be created. "

§ 11. "No railroad corporation shall consolidate its stock, property,
or franchises with any other railroad corporation owning a parallel or
competing line "

§ 12. " Railways heretofore constructed, or that may hereafter bo
constructed, in this State, are hereby declared public highways, and
shall be tree to all persons for the transportation of their property
thereon, under such regulations as may be prescribed by law. And the
General Assembly shall, from time to time, pass laws establishing
reasonable maximum rates of charges for the transportation of passen-
gers and freight on the different railroads in this State,"

§ 18. "No railroad corporation shall issue any stock or bonds, ex-
cept for money, labor, or property, actually received and applied to
the purposes for which such corporation was created ; and all stock
dividends and other fictitious increase of the capital stoi-k or indebted-
ness of any such corporation shall he void "

§ 15. "The General Assembly shall pass laws to correct abuses,

led

and prevent unjust discrimination and extortion in the rates of freight
and passenger tariffs on the different railroads in this State, and enforce
such laws by adequate penalties, to tlie extent, if necessary lor that
purpose, of forfeiture of their properly and franchises."

Now wbile it is conceded that special legislation is the bane
of all government, it must also be conceded that special legisla-
tion has hitherto been found indispensable to any regulation
of the railroad systems. The exception once conceded, every
railroad came up and demanded its own special immunities and
privileges, — its peculiar charter, which was a law unto itself.
The extent to which this was carried may be inferred from the
three thousand two hundred acts on the statute-book of Great
Britain, and the one thousand on that of Massachusetts, — nine
tenths of them, in each case, special legislation to meet the sup-
posed requirements of an organized monopoly. The exception
and its dangerous nature — the frauds which were perpetrated
under it, and the lax and confused system of legislation it was
engendering — long ago attracted the public attention and
excited its alarm. The press raised its voice, and the peo-
ple responded by inserting into more than one Constitution
provisions absolutely inhibiting the passage of any act of a
private nature. In other States the Executive accepted the
issue ; and in New York a long succession of vetoes has only
recently vindicated tho principle of general legislation. There
was in each of these efforts at reform an element of fatal weak-
ness. The fact that the railroad system occupied an excep-
tional position was ignored. Instead of conceding that this
system was made up of a number of monopolies, in regard to
the necessities of which a discretion must be exercised, jour-
nalists and legislators insisted on placing them in a position
exactly similar to that of individuals, amenable to every law
of trade. The result was, of course, failure. Tho monopo-
lies evaded or broke down tho law, and were omnipresent in
legislatures. There was no machinery in the government
adapted to meeting the exceptional case. Reformers failed to
realize that, though special legislation was corrupting the whole
political system, yet general legislation of the ordinary descrip-
tion would not meet the requirements of the case. It is here
that tho whole question lies in a nutshell, — how can the

requirements of the railroad system be met, and yet i
vidual members driven from the legislatures? A means to
this end once discovered and incorporated into the general law,
and the most difficult part of the railroad problem is solved.

This final result is not attained in the Illinois Constitution ;
bad it been, the value of that instrument would have been more
than doubled. Indeed, the provision made in it brings the
innovator just to the fatal point ; as yet he has done nothing, but
the next step involves everything. In spite of its Constitution,
Illinois must now slip back into the deep mire of special rail-
road legislation, or it must go on and solve the problem. The
case stands thus: the Constitution implies the passage of (1)
laws prescribing reasonable rates of charges on the different
railroads, and (2) laws to correct abuses and prevent unjus
discrimination and extortion in the rates of freight and p
ger tariffs.

The legislature it seems is to do this work ; if so, the wort
cannot bo dooe ; the provision is so much waste paper. It
may boldly l>e laid down as a principle, that no general law cai
be framed which will meet the exigencies of a whole railroac
system in all its manifold details. This is true in almost ever
respect. A law, for instance, authorizes the taking of land for
railroad purposes, but one road requires an exceptional amount
of land in a particular locality. A general law regulates station
facilities ; but while it may apply well to one district, it will b
simply ridiculous in its application to another. Finally, tal
the case of a general law regulating fares and freights, — tl
very one provided for in the Illinois Constitution. All
members of a railroad system do not exist under the sai
ditions as to population, traffic, and cost of construction and c
operation. Of two roads aggregating the same gross annual
receipts, the one will earn nine tenths of the whole by carry-
ing freight, and the other the same proportion by transporting
passengers. One road runs across a thickly peopled table-land,
crowded with manufacturing villages ; another climbs moun-
tain ranges and drains a poor agricultural region. Can one
general law regulating fares and freights be framed si
apply to all of these differing conditions? The propositioi
conveys its own negative. A general law calculated to affec

27

all the members of a system must be adapted to the capacity
of the weakest member of the system. So of this law, the in
cubation of which seems to be imposed upon the Illinois legis-
lature, — a general law limiting fares and freights, which will
allow the weakest road in the State to live, will be no limita-
tion at all upon the stronger roads, — what is a famine to one
is a feast to another. If, turning from this manifest absurdity,
the legislature seeks to establish tariffs adapted to particular
roads, then the whole evil of special legislation in its worst
possible form is upon it. Where, then, is the escape ?

We have thus got back to the old puzzle, — how to meet
special requirements under general laws. The solution, if
found at all, — if failure is not predestined, — will be found
by the Illinois legislature in fairly recognizing an evident ex-
ception to general conditions, and supplying an executory power
specially calculated to meet it. It is the want of this which
has brought to naught all efforts at general legislation on this
subject up to this time. They have uniformly failed from
one defect ; they were hard, unyielding, intended to apply to
differently conditioned members of one exceptional and most
complex system, and yet wholly unprovided with any discretion-
ary, adaptive, or executory power. The law was there, but it
did not move. It was a3 if a criminal law were put upon the
statute-book which was to apply to all degrees of crime indis-
criminately, without the aid of judge or of officer. And, in-
deed, this very example illustrates the whole subject. Let ua
follow out the parallel. The criminal law was once a subject
of special legislation. Individual criminals had acts passed
to meet their particular cases. The legislature was at one and
the same time judge and jury. The legislative and judi-
cial functions of government were, however, separated so long
ago, that the community has forgotten that they were ever
united ; yet it was this division, first introduced under Alfred the
Great, which alone made possible the success of parliamentary
government. Had it been the discovery of one man, he who
made it would have deserved to rank among the greatest bene-
factors of his kind. In early New England history the distinc-
tion was again obliterated. The Great and General Court was
in Massachusetts Bay both the source of law and the seat of

supreme justice. This simplicity very shortly
society became more complex, hut it left behind it the fatal
legacy of special legislation. The same confusion of functions
is exactly what has hitherto existed in regard to railroads ; the
result, both in New and Old England, is seen in a statute-book
swollen with special enactments, a legislature overwhelmed
with business it cannot do and tainted with jobbery of which
it cannot rid itself, all resulting in a railroad system which is
a confessed failure in everything but its material aspect, wil
which the legislature could have nothing to do. Can the de-
sired separation be effected 1

The solution of the problem stated in this form seems so
obvious, that it is fairly matter of surprise that it lias never yet
been practically attempted. The legislature should enact its
general laws for the requirements of railroads, as it does to
meet the innumerable civil and criminal complications which
arise ; but, in the one case as in the other, the judicial and dis-
cretionary action under the general law should be devolved
upon tribunals specially created to take cognizance of them,
The legislature declares the rule which is the same to all
but the degrees of discretion which varying circumstances e:
act iu the application of the rule must constitute a trust neces-
sarily delegated to others. At present all these distinct powers
are jealously retained by the legislatures. Their committees
sit as courts and take evidence and listen to arguments. So
far it is well. At this point, however, instead of framing a
general law or dismissing the individual case, they undertake
to give a charter to this applicant and to refuse it to that ; to
pass a special act in favor of this corporation, and to reject it as
regards that ; to authorize an increase of stock here, and to
direct the construction of a new depot there. These are func-
tions which no legislative body can successfully perform ; as
well undertake to decide every suit at law or to affix the pen-
alty to every crime. Just so long as legislatures insist on
themselves doing work of this nature, just so long will corrup-
tion increase and the statute-book fall into confusion.

Let us now apply the test to the other principle, that of
general legislation, and suppose the strict rule in regard to it
incorporated into the constitutions. The exceptional character

ea

:s-
:rs

of the railroad monopolies must also be acknowledged, as has
been dono in Illinois and Michigan. The legislature then,
enacts its general laws imposing regulations ; and, where condi-
tions would evidently vary and the exercise of a discretion by
some one be incumbent, in all of these cases, instead of hear-
ing each party through its committees and trying to resolve
itself into a jury some hundred strong, it would define, as in
the criminal law, the limits within which the discretion must
be exercised, and refer all questions which may then arise to
the tribunal created to deal with them. Take, as an example,
all questions of construction or of granting the right to con-
demn land. The law would, in general terms, lay down the
conditions and limitations governing in such cases, and the
corporations would bo referred to the proper tribunal to see
that those conditions existed or that the limitations were ob-
served. So of depot facilities and of accommodations to the
public.

The crucial test, however, will he found in the case of freights
and fares. How could any tribunal be empowered to regulate
these ? This, too, is perfectly feasible. Railroad corporations
are often spoken of as trustees for the public ; they may more
properly be regarded as lessees. They receive from the com-
munity the monopoly of a proposed thoroughfare ; tho con-
sideration they pay for this estate is the transportation over it,
under certain conditions, of all persons and property that offer.
How to regulate those conditions, which in fact fix the con-
sideration rendered to the community by the monopolist for
the enjoyment of his grant, is the point now at issue. Hitherto
these conditions have been left to fix themselves ; the lease
has been a perpetual one at a nominal rent. As the monopo-
list saw fit to reduce his tariff, by so much he raised the rent
lie paid ; he did more work for less pay, for his rent is
always in kind, — in work done. As he put up his tariff, he
lowered his rent; lie did less and the community paid him
more. Thus, practically, as long as he could vary his rates he
fixed his own rent. This must continue to be the case just so
long as railroads are controlled by private parties, if legisla-
tures undertake to settle these conditions themselves. The
ownership of the railroads by the State is one solution of the

difficulty, revolutionary in nature and doubtful in result.
Another remedy is now sought. To return to the simile of
the lease. These leases have hitherto been in perpetuity ; leases
are not generally so made. They usually fall in for revision at
the end of a term of years, and are then cither renewed on
terms acceptable to both parties for a new term of years, or, in
the case of ground leases, if no tonus can be agreed upon, the
landlord pays for the improvements on an agreed basis, and
resumes possession of the property, to let or to bold, as soei
to him good. Apply this simple and familiar process to rail
roads. A general law regulates as nearly as may be the nature
and limits of tariffs to be imposed upon and accepted by rail-
roads. All discretion within those limits, made necessary by
peculiarities of condition arising out of business, construction,
etc., must be devolved on the proper tribunal. Within those
limits it is authorized to bind the State to the corporation for a
limited term of years, subject to ronewal on a revised valuation.
The rest is a simple matter of an ordinary lease.

It cannot be said that this plan is complex or difficult to
understand, for it is but applying the daily business arrange-
ments of individuals to the transactions of a State. Two
objections, however, may be made. It may be said that it is
novel. To a degree this is true. No single feature in it is
novel, but there is a combination of the Belgian, English, and
Americau systems, in order to arrive at something adapted to
the needs and peculiarities of our social and political coudition.
Tariffs of rates, incorporated into charters and specially adapted
to particular routes, are familiar enough in England and
France ; they are not unknowif in this country, but the entire
inability of popular bodies, like our legislatures, to deal with
the very complex considerations involved has provented their
general adoption. In England those framed by Parliament
have not proved satisfactory ; in Belgium the legislature dele-
gated the labor to an official with more satisfactory results.
The principle of limited terms is not new ; the only novel
if there be any, lies in the machinery provided, through whii
to bring the tariffs up for periodical revision.

But it will be said, Who will guard the virtue of the tribunal ?
Why should the corporations not deal with them as with the

31

legislatures ? They may do so, ljut somewhere and at some
point, put on all the checks and balances that human ingenuity
can devise, we must come back and rely on human honesty at
last. One rule always holds good, — where the most direct
responsibility exists, there will the best conduct bo found.
Corruption loves a throng and shrinks from isolated places.
To divide responsibility is to destroy it. The judges of our
courts are rarely otherwise than pure ; the heads of our official
departments are conspicuous for honesty : they are always
directly and individually responsible. If we thus can, and
indeed, from the necessity of the case, must, confide the charge
of the public funds and our personal liberties to mortals like
ourselves, acting under the law, it is difficult to see why, ex-
cept that we never have done so, we cannot trust these other
interests to similar mortals. All in such cases depends upon
the men. We have had in England and in this country a suffi-
ciency of feeble attempts in this direction — hoards of trade,
railroad commissions, and various other pieces of machinery.
They have all failed, for one reason, — the principle of special
legislation was ever kept open in the background behind them.
They have uniformly possessed a mere simulacrum of power ;
their decisions were appealed from, their recommendations
were ignored, and their principal duty was to sit patiently by
and watch the corporations as they dealt directly with the legis-
lature over their heads. Instead of the legislature saying to
the sturdy corporation beggars who infested the lobby, as it
would say to civil litigants or to criminals, " Leave us! there
is the general law and there is a tribunal specially charged
with the interests of you monopolists; go to it!"- — instead
of this, the boards, commissions, and what not, have ever been
placed in the ignominious position of a court, whether civil or
criminal, from which in every case an appeal would lie to the
legislature itself. A tribunal so constituted can hardly fail,
soon or late, to sink into contempt ; least of all is it calcu-
lated to deal with powerful corporations. As a direct conse-
quence of this conspicuous distrust, these tribunals have al-
most invariably been made up of very inferior and, not seldom,
corrupt men, for no such responsibility and prominence was
thrown upon them as forced out capacity and integrity as the

only alternative to failure. Had the same class of appointees,
as a rule, been placed upon the bench, the judiciary would long
since have sunk into contempt. The duties, the responsibilities,
and the characters of those composing these boards should, on
the contrary, be brought up to the highest, standard, — to an
equality, in abort, with those of the judges of our courts.
Their tribunals should be clothed with all necessary powers
and be put forward as if the members were fully competent to
represent the interests of the State with an experience and abil-
ity, a knowledge of details, and a zeal in their occupation equal
to that ever so conspicuously displayed by the agents of the
corporations. !?uch men could certainly be found ; the corpo-
rations always have them. Meanwhile the whole subject may
be summed up in few words: under a system which permits
special legislation, hoards for the regulation of railroads are
useless ; they are, however, indispensable under one which
confines itself to general laws.

It is not impossible that the defective machinery in our gov-
ernment, to use once more the simile so often employed in this
paper, may be strengthened in the way indicated. A new
strain has been brought to bear. At present our government
occupies the impossible position of a wooden liner exposed to
the fire of modern artillery. It was built for no sueh trial.
The railroad corporations, necessarily monopolists, constitute
a privileged class, living under a form of government in-
tended to inhibit all class legislation. "We must, then, see our
government fail in this unexpected crisis, or we must strengthen
it in such a manner as to enable it to vindicate its authority.
This can only bo done through human agency ; ingenious
statute machinery, without a man inside of it, will only result
in certain failure. The other course, also, may fail, as the iron
plates of our monitors may be crushed by the weight of novel
projectiles ; but here, at least, the power of resistance can in
some degree be proportioned to the intensity of the strain.

A new work is before those vigorous intellects who, from
the editorial rooms of Chicago, inspired the late Illinois Con-
vention. They must now take the next step, or they have
made no progress. They must inspire the legislature to com-
plete the work which the convention left unfinished. It is a

case of all or nothing. Should the Illinois legislature under-
take to deal otherwise than by general laws with the innumer-
able discretionary questions involved in every railroad system,
then, in so Tar as the present discussion is concerned, the new-
constitution is a predestined failure. Should it, however,
carry on the work in an intelligent spirit ; should it do,
what has never yet been done in America, create an able
and experienced tribunal to stand between the community and
its railroads ; should it clothe this tribunal with all necessary
power and dignity, and delegate to it that discretion, necessarily
loft somewhere, in the application of general laws to monopo-
lies ; should it declare its decisions final on all points upon
which no appeal lay to the courts of law by constitutional right ;
should it then sternly refer its railroad corporations to this
tribunal, and bid them wholly begone from the lobby, or to
come there only as petitioners for general legislation ; — then,
when all this is done, and not until that time, shall we know
whether anything is to result from the Illinois experiment.
The whole country cannot but watch it with eager curiosity.
It ia the one alternative, with State ownership as the other.
The national question is impending. The whole of that legis-
lation, on which so much in the future depends, is yet to be
initiated. It may well depend upon the experiment in Illinois
whether this, too, of which all might now be hoped, is not to
wallow into the slough of special legislation It has many
times been on the brink of so doing. Should this once happen,
the machine is too cumbrous, and the interests involved too
enormous, for us soon to extricate ourselves. It is in this
regard, in its bearing on the final problem, that each ex-
periment now assumes its value. Out of many failures will
come the one success, Illinois, for the present, must deserv-
edly attract the greatest degree of attention. That great State
has first recognized in her constitution the magnitude and
exceptional uature of the problem. Under that constitution
she should not fail to be the first seriously and thoughtfully,
perhaps successfully, to grapple with it.

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